Over the next week or two during 's absence, I will try to share a topic that I think every American / Patriot needs to be aware of through a series of articles. I'll break the material up into smaller posts to make it more convenient for the reader to assimilate the information at their own pace, and also to give an opportunity to research the facts I provide as time permits. I hope you find this effort to be time well spent.
One of the laws of the Human Condition is that man must be productive in order to survive. Historically, this productivity has been measured in everything from sea shells to gold and just about every commodity in between. These commodities enabled productive man to barter or exchange his wealth for other things he desired.
The problem today is that our productivity is measured in U.S. Dollars, a currency printed at will by the Federal Reserve. Originally, the currency of the U.S. was gold and silver. With the introduction of the Federal Reserve in 1913, they established a paper currency that was redeemable in gold and silver which meant that one could take their dollars to the bank and exchange them for like value in gold or silver. Whether you were a foreigner or citizen of the US, the dollar was "as good as gold". In 1933, President Roosevelt changed that and made it illegal for US citizens to own gold.
The Bretton Woods Agreement of July 22, 1944 replaced gold and established the U.S. dollar as the new reserve currency. After all, since the U.S. had literally saved the world during World War II, and was the only country left standing with a healthy economy in the aftermath, it was reasoned that the U.S. dollar (which was fully backed by gold of course) could and should serve as the reserve currency of the world.
Then in 1971, France became aware that the U.S. was printing dollars with abandon so the began to redeem their dollars for gold per the Bretton Woods Agreements that the U.S. had signed. President Nixon realized that this would be catastrophic for the U.S. as at that rate of redemption, our gold reserves would quickly be depleted so he reneged on the Bretton Woods Agreement and "closed the gold window" which meant that foreigners could no longer redeem U.S. dollars for gold. In other words, they were stuck with paper dollars they had accumulated worth nothing more than the "good faith and credit of the U.S." no longer redeemable for gold but for goods and services provided by the issuer, the United States. We, and the rest of the world were, for perhaps the first time in history, on a complete fiat currency standard experiment. As a result, it would be instructive to view a chart of the volume of dollars that have been created since then with no real backing whatsoever as it is an almost vertical graph.
It might also be interesting to note that since 1971, we transitioned from a nation with the greatest trade surplus to one with the greatest trade deficit. This is not a coincidence.
So if the Federal Reserve can print dollars with no tie to redeemability to a true asset, then the measure of one's productivity is totally arbitrary and subject to the whim and will of the Federal Reserve. Also, the freedom to print the world's reserve currency is extremely fortunate for the U.S.(France referred to it as "exorbitant privilege") as we have become the largest debtor nation in the history of the world. In the words of Dire Straits, the U.S. is getting it's "money for nothing and its kicks for free".
Think about it...
